Tracking Global Foodservice Growth

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While you’ve likely heard a lot about “anemic growth” and “declining traffic counts” over the last few years, you may be surprised to hear that global foodservice traffic increased in every major market outside of the U.S. in the second quarter of 2017.

This finding comes from a recent report by The NPD Group, which continually tracks consumer use of foodservice outlets in Australia, Brazil, Canada, China, France, Germany, Great Britain, Italy, Japan, Korea, Russia, Spain and the United States.

Interestingly, but perhaps not surprisingly, the quick-service segment and delivery services were key drivers of global visit growth during this period as consumers globally adopted many of the same consumption habits we see in Canada.

The growth of technology — and specifically mobile — has continued to change the way consumers shop for food and the way they dine out. The use of digital technology to place orders has been growing rapidly for several years, not only in Canada, but around the world. And while the “digital door” currently represents only two per cent of all foodservice and fast-moving consumer-goods orders in Canada, it continues to be a significant visit motivator, as nearly 10 per cent of consumers claim to have been influenced by a social-media platform before making a restaurant choice. In fact, in every major market The NPD Group tracks, virtually all growth in the past three years has come from mobile or internet services. Furthermore, nearly all global foodservice-traffic growth came through the quick-service restaurant (QSR) segment, where consumers have responded positively to advantageous pricing, aggressive unit expansion and advertising of QSR chains and outlets.

Looking outside of North America, European markets continued solid, if unspectacular, recovery while Brazil and Russia —both mired in recession in recent years — also rebounded slightly. Even Korea posted a solid traffic gain.

When looking at dayparts, visits during the breakfast dayart are growing broadly, but it’s still a relatively small daypart in terms of traffic share in most global markets and can’t drive overall growth like other meals can. Lunch traffic did increase in Brazil, China, Russia and Spain, but declined in all other countries. Visits at dinner were flat or up in most countries, with the exception of Australia, Canada and the U.S.

However, perhaps the most interesting finding comes out of the U.S., where total visits to restaurants and foodservice outlets declined by one per cent — a loss of 94.5 million visits in the quarter compared to a year ago. While this finding is clearly significant to U.S. operators, it should not be overlooked by those in Canada, given that the foodservice industry is a bellwether for the economy at large and our neighbours to the south tend to have a significant impact on our economic well-being. While the U.S. has experienced seven-plus years of strong economic growth and stability, the decline in visitation traffic may indicate a slowdown in consumer confidence that may be mirrored in Canada should the nearly decade-long bull market in the U.S. come to an end.

However, until that time comes, we can (and should) focus on some of the bright spots in the marketplace — after all, it’s been a while since we’ve seen such broad-based traffic growth across the globe, which makes future quarters promising.

Volume 50, Number 7
Written By Robert Carter

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